The ERP software market in 2017 covers a wide spectrum of offerings. Here we take a detailed look at the leaders in two categories: ERP solutions for large enterprises; and ERP solutions for small and medium-sized enterprises (SMEs).
ERP solutions for large enterprises
The Tier 1 ERP vendor marketplace has grown increasingly crowded in recent years, and no single vendor has the majority of the market share. However, the four leading ERP vendors often dominate conversations around ERP options for large enterprises: SAP, Microsoft, Oracle and Infor. A recent report gives us a snapshot of how these four “titans” of the ERP marketplace compare.
Although market share is certainly not a direct indication of quality, it does give us some sense of the health of a platform and the trust that the market has placed in it. In 2017, SAP remains the leading ERP vendor by market share. However, after several years in third place, Microsoft Dynamics has overtaken Oracle in the number two position, perhaps reflecting Microsoft’s recent success with both large enterprises and SMEs.
Microsoft Dynamics 16%
Cost of ownership
The report noted a few notable changes in the cost of implementation, also known as “the total cost of ownership,” for the leading Tier 1 vendors this year. While Infor’s average implementation cost dropped, SAP’s saw a significant increase, as did Oracle’s. However, Oracle’s actual cost was the closest to its planned cost of any of the four vendors.
Microsoft Dynamics: $2.06M
Time required for implementation
The time required for implementing the top three ERP solutions were all in the two-year range. Infor, on the other hand, required a much shorter time to implement, roughly proportional to its lower cost.
Infor: 15.3 months
SAP: 23.1 months
Microsoft Dynamics: 23.6 months
Oracle: 24.5 months
The initial ROI for ERP implementations is often measured in terms of the time it takes the enterprise to make enough gains from their new system to break even on the implementation cost. Among the top four ERP vendors, there was a wide range of payback periods.
Infor: 8.5 months
Microsoft Dynamics: 12 months
Oracle: 29 months
SAP: 30 months
ERP solutions for SMEs
Three trends in the ERP marketplace have converged to make ERP solutions more readily available to SMEs. The first is the increasing availability of cloud-based solutions, which greatly reduces the cost of deployment. The second is the expansion into the ERP space of software companies that have been previously successful in related areas, such as accounting and customer relationship management (CRM). The third is the aggressive push of Tier 1 vendors, such as SAP, to reach the higher-volume SME market with more affordable, scaled-down versions of their offerings.
With these trends in mind, let’s have a look at three notable solutions in the emerging, relatively low-cost ERP software market:
Oracle NetSuite OneWorld
Cost: $999 + $99/month per user
NetSuite OneWorld is a highly scalable, comprehensive ERP solution that won an “editor’s choice” spot in PC Magazine’s 2017 comparison of ERP solutions roughly targeted at SMEs.
Acumatica features browser-based, mobile-friendly navigation and the flexibility to run on a variety of databases. Implementation options range from on-premise to hybrid to cloud. Acumatica earned an “editor’s choice” spot from PC Magazine, who found it to be a “a good fit” for SMEs.
SAP Business One Professional (hosted)
Cost: $82/month per user
SAP Business One is a robust, highly-customizable, affordable solution that delivers rich analytics when run on SAP HANA. However, PC Magazine concluded that SAP Business One’s implementation requirements could overwhelm SMEs without an experienced implementation partner.
The overall ERP landscape
The ERP software marketplace in 2017 is complex and highly differentiated. For large-scale enterprises, the top four vendors by market share are SAP, Microsoft Dynamics, Oracle and Infor, with Microsoft Dynamics making impressive recent gains. For software makers targeting SMEs, the term “ERP software” has become increasingly elastic. Accounting and CRM vendors are offering expanded versions of their software to capture the emerging ERP market for SMEs. At the same time, Tier 1 ERP vendors are offering scaled-down versions of their software to reach the same market. Notable offerings in this crowded space include Oracle Netsuite OneWorld, Acumatica and SAP Business One Professional.